Guinness Global Energy Fund on Valero Energy Corporation
Thesis
Valero is the fund's independent US refining exposure and trades under ticker VLO. ([SEC][1]) The managers highlight its substantial US Gulf Coast presence and note that it is benefiting from stronger refining margins. This fits the broader fund view that refining has become the key bottleneck in the global energy system, with disrupted product exports, years of underinvestment and limited new capacity supporting unusually strong refining economics. The managers expect refining margins and oil-product prices to remain elevated for some time and believe energy equities still do not fully reflect the sector's potential earnings power.
“Valero has a reasonably large presence on the US Gulf Coast and is benefiting from a recovery in refining margins.”
Key risks
- Energy-sector concentration and volatility
- Market and currency movements